The small business ombudsman is looking to consult with small and family enterprises exiting from financial advice businesses, reporting that her office has been inundated by cries for help following AMP’s advice restructure.
Australian Small Business and Family Enterprise Ombudsman Kate Carnell commented that small advice business owners have told her that “licensors’ handling of matters have not been transparent or equitable”.
The ombudsman has called for advice licensees who feel their treatment has been unfair to come forward.
“We’re concerned about a number of behaviours that may include the conduct of lookback audits, financial planning licensors shifting responsibility for client compensation payments to licensees, short notice periods provided to licensees exiting the business and restraint of trade provisions,” Ms Carnell said.
“Following recent media reports regarding AMP Financial Planning’s restructure of its business, my office has received dozens of requests for assistance from small business financial planners across a number of licensors, many of who say they are facing financial ruin.
“Small business owners are reporting that they are facing the brunt of brutal restructures by their licensors.”
Small or family businesses that have been impacted by changes in the advice sector are encouraged to contact the ombudsman’s office.
ifa has reported extensively on the effects of AMP’s buyer of last resort (BOLR) scheme downgrading the value of its advisers’ businesses, with some practices receiving termination letters as the bank overhauls the division.
A growing number of AMP advisers could be forced to sell their homes to pay back business loans to the bank.
The FSU last month lodged a dispute with the bank over the BOLR issues, while the AMP Financial Planners Association has looked into filing a class action.
Further to AMP, the big four have also all acted to depart from advice. CBA exited the last of its businesses in the sector earlier this year, selling Count Financial for $2.5 million and retiring Financial Wisdom and CFP Pathways.
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